An Overview
South Bay Resources, LLC is a technology-driven oil and gas exploration and production company headquartered in Houston, Texas. To date, exploration and development activities and current production have been concentrated in Matagorda County, Texas. The company is now also exploring in Alberta, Canada, as well as seeking acquisition opportunities there. Our new partnership includes plans to drill and complete four to six wells before the end of 2008 in the Radway area - a hydrocarbon rich area located northeast of Edmonton.
In Texas, extremely successful drilling (success rate > 70%) has grown South Bay from start-up to a production rate of approximately 7 MMcf and 300 barrels per day. Currently, nine wells are producing and we are drilling the first of possibly several deep wells in Matagorda County. Plans for 2008 include capital expenditures for drilling of ~$7 million in Matagorda County.
South Bay is focused on the identification of lower-risk hydrocarbon-bearing targets within geologically complex areas containing previously productive reservoirs. South Bay employs techniques that efficiently mine a comprehensive data base of digitized logs, well production histories and simultaneously inverted 3D seismic data. Application of such techniques allow for the identification of hydrocarbon-rich targets that are similar to previously drilled successful wells but remained undiscovered due to their geologic subtlety.
South Bay's strategy can often allow for the acquisition of relatively inexpensive data and land, which when combined with quick processing of available information, will result in the rapid conversion of capital spending into cash flow.
Financial returns of this business model are further enhanced by its tendency to find deeper accumulations of oil and/or gas in significant amounts that were not previously recognized but that become apparent as a result of the intense analysis of such a relatively small area that the above described approach entails. South Bay has identified and marketed one such opportunity in Texas and is pursuing two in Canada. Typically such targets are substantially more expensive and mechanically more difficult than the normal South Bay prospect and as such are often sold or farmed-out.
South Bay sponsors partnerships that are project-oriented and focused on relatively small geographic areas where it is believed that both maintenance rate of return programs and opportunities for enhanced returns exist. South Bay presently sponsors two partnerships: South Bay Resource Partners, LP which is presently focused exclusively on a 150 square mile 3D shoot in Matagorda County, Texas; and South Bay Resources Canada, LP which is focused on opportunities in Alberta, Canada.
